Does third party fee apply to POS sales using external payment providers?

[brevanbesouw]

I have a question regarding the external payment providers. Right now, all payments on my website are done through shopify payments or paypal; however, my POS sales are unfortunately done through Square. This was necessary because I don't use Apple products (iPad or iPhone), and the shopify chip and tap reader is not compatible with android devices. I've also not been able to successfully take card payments with the stripe reader (I've tried 2 different ones). I'm curious if the third party fees still apply to POS sales, as I'm pretty much forced to use a third party provider unless Shopify updates their payment hardware.

Can someone clarify this for me?

Thanks,

Breanne

[fabrics]

I too received this fee update email yesterday from Shopify and have asked for clarification, but my reply to their email bounced back to me.  I have since forwarded it to billing and hopefully someone will get back to me with some answers.  I too need some clarification because the update certainly was not clear to me either.   

[Elias · Accepted solution]

Greetings, @brevanbesouw & @fabrics.

Thank you both for reaching out and posting this question!

There are some upcoming changes with how third-party transaction fees are calculated, which are fees collected on orders that are financially brokered (arranged) by Shopify, and we have this information updated on our pricing page. In short, if you're using Shopify Payments for your Online store, then there wouldn't be any third-party transaction fees for third-party gateways (eg. PayPal, Amazon Pay) - with the exception of Shopify Payments Sweden, Austria, and Belgium where third-party transaction fees are required. However, if you're using a third-party gateway, then the third-party transaction fees would apply and Shopify uses this formula:

[(cost of products - discounts) + tax + shipping charges] x rate

That being said, I understand that you're more concerned about changes with the third-party transaction fees on Shopify POS, and I'm happy to clarify that there aren't any changes in this regard. Since the actual payment with external card readers and/or manual payments aren't processed by Shopify, then Shopify wouldn't collect third-party transaction fees for these types of transactions. 

I'd love to hear more about your businesses! What kinds of products do you sell? Are you running any ad campaigns at the moment? Or, do you have a marketing plan prepared for your business?

[fabrics]

Thank you for responding but I am still not clear on what I am going to be charged for.   I use shopify payments which I assumed included paypal.  It certainly did when I signed up.  So is this going to be the extra charge?  If so, it seems unfair, that Shopify  now feels it needs to have a piece of this pie as well.  We already pay fees to paypal for these transactions.  Can we please be absolutely clear about the additional charges? What exactly are these added fees being applied to?  Please don't keep it a secret.  What exactly do we mean when we say Shopify payments  Visa, Mastercard, etc.etc.??   What is classed as a third party (Paypal)(e-transfer)?   I don't want to have to do any guessing about this, but I do want to know exactly where the fees are being applied so that I can make some adjustments.  I use shopify and paypal.  I also use e-transfer are both of these are going to have added fees?  Please tell me...... Oh yes just so you know I am not talking about POS.   Thank you

[fabrics]

Hit this is error

[Elias]

Hey, @fabrics.

Thank you for joining the thread!

I understand your concern and I'd be happy to further clarify the third-party transaction fees. When using Shopify Payments, Shopify will typically waive transaction fees for third-party gateways, such as PayPal or Amazon Pay. However, it's important to note that the third-party gateways also have their own transaction/credit card processing fees, which may still be applicable on those transactions.

Shopify Payments handles the credit card processing for your online store, which includes VISA and Mastercard, and transactions are subject to the credit card processing rates as outlined on our monthly plans. However, the only exception to this is Shopify Payments Sweden, Shopify Payments Austria, and Shopify Payments Belgium, where transaction fees are charged on any third-party or alternative gateway transactions. 

As for e-transfers, they're a form of manual payments (eg. external debit) as the funds are collected outside of Shopify. So in this case, you also wouldn't need to pay for any third-party transaction fees. Manual payments also include cash on delivery. However, there is an exception to this rule with Advanced Cash on Delivery (only available in India). 

I hope this addresses the concerns! If you have any other questions on this topic, don't hesitate to let me know!

[brevanbesouw]

Great, thanks so much for clarifying! I manufacture and sell children's clothing. Not currently running any ad campaigns but thinking about it for our next product launches coming up. I'll check out the marketing plan information!

Thanks,

Bre

[Dbro]

For greater clarification we own a retail store and process pos transactions through a moneris credit/debit machine with shopify tracking inventory. Are we expected to now pay  depending on our plan 2%/1%/0.5 on every transaction we put through our POS device starting June 16th. What examples would qualify as a third party? 

[Elias]

Hey, @Dbro.

Thanks for joining the thread!

The Moneris terminal is an external card reader, where the funds are collected outside of Shopify. Similar to manual payments, Shopify doesn't collect third-party transaction fees on these types of transactions. However, depending on which payment gateway you're using for your Online store, third-party transaction fees or credit card processing fees could apply on orders placed online or through draft orders. 

I'd love to hear more about your business! Which payment gateway are you using for your Online store? Also, what kinds of products do you sell?